Supreme Court of New York, Appellate Division, Fourth Department
MATTER OF DAVID E. FRETZ, AN ATTORNEY, RESPONDENT. GRIEVANCE COMMITTEE OF THE EIGHTH JUDICIAL DISTRICT, PETITIONER.
PRESENT: SMITH, J.P., FAHEY, CARNI, SCONIERS, AND GORSKI, JJ.
OPINION AND ORDER
Respondent was admitted to the practice of law by this Court on January 12, 1989, and formerly maintained an office in Williamsville. The Grievance Committee filed a petition charging respondent with acts of misconduct, including engaging in illegal conduct involving deceit and misrepresentation, neglecting client matters, misappropriating client funds, and failing to cooperate with the investigation of the Grievance Committee. Respondent filed an answer denying material allegations of the petition, and a referee was appointed to conduct a hearing. Prior to the hearing, factual issues relating to the charges of misconduct were resolved by stipulation and thus the hearing was held only on the affirmative defenses and matters in mitigation raised by respondent. The Referee has submitted a report, which the Grievance Committee moves to confirm and respondent cross-moves to disaffirm.
The Referee found, based upon the stipulated facts, that respondent was retained in 2004 to represent a couple whose home had been destroyed by a fire in December 2003. Respondent ignored both inquiries from those clients (hereinafter, homeowners) and requests made by opposing counsel to schedule depositions required to be conducted pursuant to the terms of the homeowner's insurance policy. In addition, respondent made false statements to the homeowners that the insurer was responsible for the delay and that he had commenced an action against the insurer. He filed an action against the insurer on the last possible date on which to do so pursuant to the terms of the policy, and the action was dismissed when he failed to respond to the insurer's motion to dismiss the action on the ground that the homeowners had not submitted to the required depositions. In response to an inquiry by the homeowners concerning the status of the action, respondent denied that it had been dismissed.
While the action against the insurer was pending, respondent agreed to represent the homeowners in a summary eviction proceeding brought by the mortgagees of the real property. He failed, however, to appear in court on the adjourned date of the hearing in the eviction proceeding, which resulted in the entry of a default judgment evicting the homeowners from the property and awarding money damages to the mortgagees. He later closed his law office without providing any notice to the homeowners or leaving them with any contact information, and he instead commenced employment with a financial firm.
The homeowners thereafter commenced an action against respondent seeking both compensatory damages for legal malpractice and treble damages for intentional deceit, pursuant to Judiciary Law § 487. Respondent did not contest the malpractice action, and a judgment was entered awarding the homeowners compensatory damages in the amount of $226, 000 and punitive damages in the amount of $700, 180.82. Respondent failed to appear in response to a subpoena for a judgment debtor examination and failed to respond to an order to show cause brought by the homeowners seeking an order finding him in contempt.
Additionally, the Referee found, based upon the stipulated facts, that between 2005 and 2006 in six other matters, respondent accepted retainer fees from clients, failed to complete the work for which he was retained or to refund in a timely manner the unearned fees or funds entrusted to him for expenses or fees related to those matters, and failed to safeguard or deliver property entrusted to him, all of which resulted in actual or potential harm to his clients. The Referee further found that respondent issued checks drawn against his attorney trust account for payment of personal and office expenses, commingled client funds with personal funds, issued trust account checks made payable to cash or to himself, and failed to keep required bookkeeping records. Finally, the Referee found that respondent failed to cooperate with the investigation conducted by the Grievance Committee.
Respondent raised as affirmative defenses and in mitigation of the misconduct that he began suffering from severe depression in 2005, but ignored advice to seek mental health treatment until 2007; that he did not contest the legal malpractice judgment, including the finding of intentional deceit, because he had been advised by a pro bono attorney to allow the homeowners to obtain a default judgment against him to enable them to recover damages from his malpractice insurer and he was unaware that they were seeking treble damages; and that he did not respond to the subsequent judgment debtor subpoena or order to show cause for contempt because he mistakenly believed that an agreement had been reached with the homeowners pursuant to which the default judgment would not be executed against respondent in his individual capacity.
The Referee found that respondent failed to demonstrate that he was suffering from depression at the time the misconduct occurred and noted that respondent was able to attend properly to other client matters during the same time period and to make a career change. Additionally, the Referee found that, although respondent was advised to allow a default judgment to be entered in the malpractice action, he was never advised to ignore a subpoena or an order to show cause for contempt.
We confirm the findings of fact made by the Referee and conclude that respondent violated the following Disciplinary Rules of the Code of Professional Responsibility:
DR 1-102 (a) (3) (22 NYCRR 1200.3 [a] )- engaging in illegal conduct that adversely reflects on his honesty, trustworthiness and fitness as a lawyer;
DR 1-102 (a) (4) (22 NYCRR 1200.3 [a] ) - engaging in conduct involving dishonesty, deceit or misrepresentation;
DR 1-102 (a) (5) (22 NYCRR 1200.3 [a] ) - engaging in conduct that is prejudicial to the administration of justice;
DR 1-102 (a) (7) (22 NYCRR 1200.3 [a] ) - engaging in conduct that adversely reflects on ...